Oil prices increased on Friday over strong demand signals in the US after a more-than-expected fall in the country’s crude oil stockpiles and the escalation in the Middle East conflict.
The international benchmark crude Brent traded at $77.53 per barrel at 10.15 a.m. local time (0715 GMT), a 0.49% increase from the closing price of $77.15 a barrel in the previous trading session on Thursday.
The American benchmark, West Texas Intermediate (WTI), traded at the same time at $72.02 per barrel, up 0.35% from Thursday’s close of $71.77 per barrel.
Both benchmarks slipped around 3% in previous trade over easing supply concerns after the world’s top shipping companies, including container giants Maersk and Hapag-Lloyd, announced plans to resume shipping transit through the Red Sea following the suspension of services due to increased attacks on commercial ships by the Yemeni Houthi rebel group.
However, prices rebounded after industrial data revealed an upsurge in demand in the US, the world’s largest crude oil-consuming country.
According to data released by the Energy Information Administration (EIA) on Thursday, US commercial crude oil inventories decreased by around 6.9 million barrels to 436.6 million barrels, compared to the American Petroleum Institute’s expectation of a rise of around 1.8 million barrels.
Meanwhile, the escalation in the Middle East conflict continues to exert downward pressure on prices.
The US Central Command said on social media platform X on Thursday that it shot down a Houthi drone and an anti-ship ballistic missile in the southern Red Sea.
-Hopes of US interest rate cuts support price upticks
US dollar-indexed oil prices are benefiting from a soft landing as a result of the growing probability of the US Fed’s interest rate cuts in March and the depreciation of the dollar.
The dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc fell 0.11% to 100.79, encouraging oil-importing countries to purchase more crude oil at cheaper dollar prices.
